UAE’s First Gulf Bank Q4 net profit up 11%

ABU DHABI: First Gulf Bank, the largest lender by market value in the United Arab Emirates, beat estimates yesterday as it reported an 11 percent rise in fourth-quarter profit.

It is the second Abu Dhabi bank to report positive earnings yesterday after Abu Dhabi Commercial Bank posted a 16 percent quarterly profit gain. It had up until now been a broadly disappointing earnings season for the emirate’s lenders, with National Bank of Abu Dhabi and Union National Bank reporting falling profits.

FGB made a net profit of 1.72 billion dirhams ($468.4 million) in the three months ending Dec. 31 compared with 1.55 billion dirhams in the same period a year earlier, it said in a statement. Analysts polled by Reuters had forecast an average net profit for the quarter of 1.46 billion dirhams.

The earnings improvement was largely due to 681 million dirhams of what the bank called “other operating income”, although it did not specify what this derived from. This income helped offset writedowns that had more than doubled year on year to 507 million dirhams, as well as a 6 percent decline in fees and commission income.

Net interest income rose 2 percent to 1.66 billion dirhams. For 2015, the bank said net profit was 6.01 billion dirhams, up 6 percent from 2014, which Chief Executive Andre Sayegh said was achieved despite “a challenging operating environment”.

In November, FGB cut close to 100 jobs, sources told Reuters, part of an increasing wave of redundancies at Emirati banks as they adjust to deteriorating market conditions caused by lower oil prices after a period of significant expansion. —Reuters